BusinessNZ afraid reducing net migration by 20k-30k will see employers struggle to find staff and affect the $4b export education sector, yet it sees Labour's proposal to regionalise skills shortage lists as a positive

BusinessNZ fears Labour’s policy to reduce net migration by 20,000-30,000 a year could be “difficult for business”.

Labour has announced its intentions to slash net migration from where it’s at now at around 70,000 a year, largely by preventing people from getting residency through low-level qualifications and work.

BusinessNZ chief executive Kirk Hope says that coming further to immigration restrictions already imposed by the Government, Labour’s crack-down could make it harder for businesses to fill jobs.

"Employers are finding it hard to fill positions in hospitality, IT, horticulture, construction and other sectors. The more restrictions that are placed on lower-skilled migrants coming here, the harder it will be for the economy to grow," he says.

He points out the Government has already restricted low-skilled workers to three-year visas, restricted skilled worker visas to those earning more than $49,000 a year, and increased the points needed for skilled migrants to get residency.

Little: We’ll never get NEETs into work if employers can easily recruit from offshore

Yet speaking to media at the launch of his policy, Labour Party Leader Andrew Little said: “I think the way… MBIE is managing immigration and the rules that we’ve got means that employers are able to, very easily and very loosely say, ‘I can’t hire someone locally, I need to bring someone in from overseas’.

“I do not believe that with 90,000 young people with no work, that we do not have amongst that number, 100 shelf stackers [for example].”

With another 40,000 people out of work, Little says: “We’ve got to focus on that part of the problem, before we start… loosening the rules that mean pretty much anybody can come to New Zealand regardless of the nature of the job and the level of the skill required.”

Hope says Labour’s policy should be complemented by policies to improve the quality and responsiveness of training, careers advice and information, and how employers use skills in the workplace to boost productivity.

Little says Labour already has a number of strategies to do so. For example, its Ready to Work policy would give all young people who have been on the Jobseeker’s Allowance in the Work Ready category for six months, a full time job for six months on environmental and community projects.

Its Working Futures Plan would also provide three years of free post-school education over a person’s lifetime. This could be used for any training, apprenticeship or higher education approved by the New Zealand Qualifications Authority (NZQA).

“It is going to take a while [getting people not in employment, education or training into work]. It is a big number. But I guess we never get there if we have that avenue that employers can go to very easily, which is ‘Well, I just decided I can’t find anyone locally, so I’m going to recruit offshore,’” Little says.

$4 billion export education sector to lose 10s of millions of dollars

Digging in to the detail, Labour intends to reduce the number of Student Visas issued each year by 6,000-10,000, and the number of Post Study Work Visas by 9,000-12,000.

It proposes to stop issuing student visas for courses below a bachelor’s degree which aren’t deemed “high quality” by the Tertiary Education Commission and NZQA.

It also wants to remove the ability for overseas students to work while here, except where the work is approved as part of the study.

Finally, it wants to ban work visas for overseas students who have completed study here if they do not already have a job.

Hope says that while Labour has taken a “logical approach”, as international students make up a large part of overall applications for residency, the policy would have to be implemented with care, as export education is an important revenue earner for New Zealand.

"Private Training Enterprises offering lower-level courses and schools and colleges and local communities hosting international students in all parts of New Zealand could be significantly impacted by this policy," Hope says.

However Little doesn’t believe the policy will cause education providers to shut their doors.  

He says the PTE sector is “agile” and there will be demand for lower level courses from the likes of people changing careers later in life.

He believes the policy would only set the export education sector back 10s of millions of dollars - a “drop in the ocean” for a $4 billion industry.

Regionalising and rationalising skills shortages list a positive

BusinessNZ isn’t entirely critical of Labour’s policy.

Hope says Labour’s proposal to tighten skills criteria, place more consideration on skills needed in the regions, and more actively enforce the Labour Market Test for work visas, will bring higher-skilled migrants to New Zealand benefit the regions and ensure employers are not misusing the Labour Market Test.

"It would be particularly useful to get the regions’ skill needs more comprehensively represented in the occupational shortages list, to have visas issued for work in specific regions, and to involve regional businesses and business organisations in those decisions.

“For regional economic growth, businesses rely on a mix of skills - some provided by migrants - and it is important to give regional economies the best chance of success," Hope says.

Little expects the number of work visas issued to fall by 5,000-8,000 over a year, as a result of regionalising and rationalising skills shortages lists.

Overall, Little is adamant that letting less people into the country won’t slow economic growth. He is confident any losses in GST income for example, will be offset by the savings and benefits of getting more unemployed New Zealanders into jobs otherwise taken by migrants.

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

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"Labour's migration policy 'difficult' for business "

Correct difficult as most business in NZ survive on low/under paid wages - open secret.

Agreed will have some problem as will be hard to find cheap employees but is this the prosperity that we want. This situation has been created - catch 22 situation and someone has to take the step.

Should think of Short term pain and long term Gain.

News Headline: "BUSINESS NZ AGHAST AT OUTRAGEOUS SUGGESTION THAT THEY SHOULD PAY STAFF":

"Mr Norman 'Podge' Asquith, Chairman of Business NZ said to our reporter "How dare these entitled local oiks expect minimum wage? They should be grateful to stick their arms down my toilet for $3 an hour, and if they're too drugged to clean toilets for less than the cost of their transport, and haven't the intiative to bribe us to hire them like Josefina from the Phillipines, then they can just go hungry until they know their place, starve, or we run out of imported people who will work for nothing. They've nobody to blame but themselves."

"BUSINESS NZ AGHAST AT OUTRAGEOUS SUGGESTION THAT THEY SHOULD PAY STAFF":

:)

How true

As an employer I have absolutely no problems with the policy. Doesn't affect us really as we pay our staff decent wages.

It is those employers or industry that survives on low underpaid wages will make the most voice as they cannot even think about paying minimum wage or else how will they survive.

One business that will be affected is the Rest Home Industry.
Try as they like they couldn't convince kiwi's to clean other peoples bottoms and despite a new law increasing the wages NZers will remain shy about doing this job.

And the hours. In a rational economy an experienced care nurse working anti-social hours should have little problem earning $50k - note they need responsible people onsite all night so long hours, high resonsibility but mainly light work. Maybe the carehome model is wrong - staff should be on the living wage plus s generous share of profits.

Forked tongue talk but surely a 2 - 3% drop in unemployment would solve the problem. Is it though too many on that list are unskilled and want to stay exactly like that or are the low wages, as may be relative, too unattractive when compared to the dole?

"Difficult for business!!!" So they want it handed to them on a platter do they?

High immigration has very significantly depressed wages, which must have made it easier for business and significantly reduced their motivation to improve productivity. Ongoing productivity statistics bear this out.
I would suggest that it has been far too easy for business and it long past the time when they face realistic wage pressure, get off their backsides and apply themselves to getting more creative, efficient and productive. For years it has been far too easy to invest our spare cash in property at the expense of creativity, and capital to improve productivity. If some businesses cannot cut the mustard when faced with more realistic business pressures, then as a country we would all be better off without them, and their staff and resources redeployed filling the void left by the absence of immigrants in more productive better paying work. Our average income would rise without the low wage low productivity enterprise.

Agree.

Check out the hospitality sector: "We're not willing to pay our top chefs over $49k so they can have a path to residency!"

Given they themselves have noted they use largely short term / tourist visa-holders for lower level staff (who have no intent of becoming residents) precisely how many of their staff would be affected by the proposed changes in eligibility for residency, and why - if these people are so valuable to them - are they not willing to pay these few more than $49k?

And then they complain that young New Zealanders don't take hospitality seriously as a career path.

I have no objection to prices going up and being able to eat out fewer times if it means people get a fair wage.

Yes and many of the senior chefs in the industry are on a salary (my son was one) and working 70 to 80 hour weeks. So that even if you earn 50k it's pathetic once averaged out on an hourly basis

It is interesting that you mention the hospitality sector, we went to our local cafe on Saturday night for a hot chocolate and dessert. Including us there was only two couples there, the first having ordered mains just before us. The drinks were served promptly and were delicious but we had to wait a good half hour for the deserts. There was one young cook who seemed busy the whole time plus three front of house staff who had little to do but stand around talking to each other. A number of point are observed.
1 Why was there such a heavy weighting with front of house staff? If you have good staff it is more effective to have a ratio nearer 1:1
2 If you employ some good front of house staff, they can help in the kitchen to even out the peaks and troughs and provide better service
3 It was pretty apparent that the proprietor was not present.
4 Seemed to me that chef should have been able to get out the desserts in between the work of producing the mains. May be she was inexperienced and I can't fault her for effort.

I took these point up with my daughter who has some experience in the sector when she was a student. Her points were
1 Far too many front of house staff
2 A good front of house person can do a lot in the kitchen to help the chef and greatly improve service, but if you try to negotiate a wage rise you get no where, but are then expected to do this and you will get bad treatment from management and other staff if you don't pitch in or things are going badly with food service. So it is little wonder that people bother trying to be more helpful.
3 Restaurants pay little extra for good staff.

I think that this illustrates how the low wages of hospitality staff might mean management under value staff performance, leading to poor performance, lax staff management and generally poor productivity. In the case of this place they would have been better off paying a bit more for good staff that can work together more productively and over all at a lower cost.

I used to belong to the Employers Association. Then I worked out they funded Business New Zealand. So I flicked the Employers Association.
Why is it called "Business New Zealand" They don't represent New Zealand. Maybe they should be called 'Business Somewhere Else'.

"affect the $4bn export education sector"

Thats a fancy name for the scam that is going on. C'mon Bill enough is enough. Sort it out - Nz is becoming a joke around the world with this, no wonder the Aussies are making things harder for "kiwis"

Agreed. I've posted similar. Scam and Joke are appropriate words. What concerns me is the exploitation, the "no sex, no visa" quoted by one immigrant but what really, really worries me is that few Kiwis seem to care - it is an attitude of "they are foreigners so none of my business".